The refund I received this year was $210 less than I expected it to be. After months of waiting for a letter from the IRS, I finally called and found out what happened. They charged me for insufficient funds for an estimated tax payment I made. I am trying to dispute the charge because there’s no harm in asking. Here is what I am writing to the IRS:
My Letter To the IRS
I do my best to fully follow all IRS laws and guidelines. It takes a lot of time to find out what my responsibilities are, but I go through a lot of painstaking work to ensure I am doing my civic duty and paying all taxes I might owe.
I recently found out that I was charged a 2% penalty for an attempted estimated tax payment in April 2012. I was not made aware of the issue until May 2013 when I requested more information from the IRS about $210 that was deducted from my tax refund for tax year 2012.
With that in mind, I have fully read the information regarding: Pay Taxes by Electronic Funds Withdrawal.
Nowhere does it say that a 2% penalty should be assessed. It mentions that I would receive a letter, but I never did.
Only after being notified of the penalty (over a year after the penalty was apparently assessed) did I find this: Topic 206 – Dishonored Payments.
That does not talk about electronic funds, so I do not believe it should apply to my case.
Additionally, while the webpage has since been updated to remove the following portion (last update: May 23, 2013), I believe it may have been in place at the time of the payment and should apply to my situation.
Electronic Funds Transfer and Payments made by Other Than Check or Money Order
“Payments made through the Electronic Federal Tax Payment System (EFTPS), and payments made by other than check or money order for which there are insufficient funds are generally not assessed a bad check penalty. If a penalty is assessed, please respond in writing to the address on the notice you received regarding the penalty. If the payment is made late there may be a penalty for failure to deposit and/or failure to pay tax timely.”
Finally, since this was a voluntary deposit for estimated taxes and not a tax payment that was expected by the IRS, I don’t believe that the penalty should be applied in this situation.
Please consider my request and let me know if you require any other information.